Public Interest Litigation Nos. 34, 41 and 42 of 2013. Case: Sambhaji Savkar Jadhav Vs Insurance Regulatory & Development Authority. High Court of Bombay (India)
| Case Number | Public Interest Litigation Nos. 34, 41 and 42 of 2013 |
| Counsel | For Appellant: Partha Sarathy Sarkar, Adv. and For Respondents: O.S. Das, Ralhina Maravarman, Mohamedali M. Chunawala, G. Hariharan i/b A.A. Ansari, Janak Dwarkadas, Senior Advocate, Dr. Birendra Saraf, Ravi Suryawanshi i/b. Naik & Nail & Co., Paritosh Jaiswal, Harshada Nagare i/b. Daya Gupta, Padma Divakar, R.R. Bhonsale, AGP and Milind More, AGP |
| Judges | Mohit S. Shah, C.J. and M. S. Sonak, J. |
| Issue | Constitution of India - Article 226 |
| Judgement Date | August 14, 2014 |
| Court | High Court of Bombay (India) |
Judgment:
Mohit S. Shah, C.J.
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All these three petitions under Article 226 of the Constitution of India purporting to be public interest litigation, have been filed by the same petitioner-Sambhaji Savakar Jadhav, mainly alleging violation of Guidelines for Foreign Direct Investment (FDI), particularly the Guideline imposing 26% Cap on FDI in Insurance Sector.
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In PIL No. 34 of 2013, the petitioner is complaining about alleged violation of FDI Regulations by Future Generali Life Insurance Company Ltd. (Future Generali) and for seeking suspension of its licence and for removing its Directors and members of the Managing Committee.
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In PIL No. 42 of 2013, the petitioner is seeking a direction against Insurance Regulatory & Development Authority (IRDA) to:
(i) levy monetary penalty on Future Generali for alleged FDI violation;
(ii) to conduct probe into capital structuring by Future Generali and to direct IRDA to withhold its approval to the transaction of stake sale by Future Generali's any of the insurance ventures or by any other promoters to any entity;
(iii) on the ground of illegal transactions undertaken by Participatie Maathaschappij Graafschaap/Generali) to direct IRDA to deny the continuation of the business by the said Company or any of their group company.
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In PIL No. 41 of 2013, the petitioner has sought probe into:
(i) the share holdings of Bank of India and Union of India in the Board of Star Union Dai-chi Life Insurance Co. Ltd. (Star Union);
(ii) probe into the selection and posting of their senior personnel and particularly into selection and appointment of Shri Girish Kulkarni as CEO and Managing Director of Star Union and for removal of Shri Girish Kulkarni from the services of Star Union;
(iii) to continue such probe even if Shri Girish Kulkarni resigns from his position any time before/during the course of/conclusion of probe proceedings.
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When petitions reached hearing on 17 July 2014, learned counsel for Future Generali and two banks raised a preliminary objection about locus and bona fides of the petitioner and, therefore, looking to the nature of the preliminary objections, we called upon petitioner Shri Sambhaji Savkar Jadhav to appear before this Court.
Accordingly the petitioner appeared before us at the hearing on 24 July 2014.
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The serious objection raised by the learned counsel for the Respondents is that the Petitioner is only a front put up by Shri Partha Sarathy Sarkar (his Advocate), who was an employee of Future Generali and was posted under Shri Girish Kulkarni, Shri Partha Sarathy Sarkar came to be dismissed from service of Future Generali and, therefore, the present petitions have been filed to take revenge of his dismissal. The petitions are thus filed out of vendetta against Future Generali and against Shri Girish Kulkarni.
On merits, it is submitted on behalf of the Respondents that the Respondents have not committed violation or breach of FDI Policy/FDI Regulations and that present three PILs are filed mala fide and out of vendetta against Future Generali and against Shri Girish Kulkarni.
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Before we deal with the Petitioner's contentions on merits or the Respondents' contentions on locus standi and bona fides of the Petitioner, it is necessary to refer to the share holding pattern of different entities as the allegations are about violation of FDI Guidelines prescribing 26% cap on FDI in the Insurance Sector.
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There is no dispute about the above statistics of share holdings in the concerned companies. It is thus clear that Pantaloons and its nominees who are Indian companies have total shareholding of 74.304% in Future Generali. Investment of Participatie Maatschappij Graafsschap (a Holland based company) in Future Generali is only 25.696% meaning thereby less than 26%. It is not even the petitioner's allegation that the shareholding of Participatie Maatschappij Graafsschap in Future Generali is in excess of 26%.
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The learned Advocate for the petitioner, however, would submit that Future Generali has committed serious violations of FDI Guidelines by manipulating the prices of shares. It is contended that as per FDI Guidelines at the relevant time, there could not have been any FDI exceeding 26%. But, it is alleged that, Shri Girish Kulkarni was a senior management employee of Future Group of Companies-'Pantaloon Retail Financial Services'. Within a year or so of his joining, he got started Future Generali Life and Non-life Insurance in which the actual FDI of the Holland based company Participatie Maatschappij Graffschaap was about 50%. However, it was disguised to sub 26% so as to fit within the FDI cap. It is contended that the manipulation has taken place by Pantaloons by manipulating the prices of its shares.
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The Department of Industrial Policy and Promotion in the Ministry of Commerce and Industry...
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